Corporate Governance and Compensation Committees receive an additional annual retainer of $15,000, and the Chairs of the Audit/Finance Committee and Value Enhancement Committee receive an additional annual retainer of $20,000, all paid in cash in quarterly installments. Our Board Chair receives no additional retainers for serving on any of our committees.See“LEADERSHIP STRUCTURETABLE OF THE BOARD OF DIRECTORS”in this proxy statement for more information on the Chair and Vice Chair of the Board.CONTENTS
Newnon-employee directors receive a grant of restricted stock units (RSUs) equal in value to $32,500, which is 50% of the annual cash retainer for directors other than the Board Chair and Vice Chair, if any. Upon election to the Board, thenon-employee directors’ RSUs vest in equal installments on each of the first three anniversaries of the date of grant. Shares of our common stock and RSUs granted tonon-employee directors are issued under our Second Amended and Restated 2010 Stock Incentive Plan (Second A&R 2010 Plan).
In 2014, the Board adopted a policy that permits a director age 65 or older to elect to receive all of his or her retainer in cash, provided they continuously meet the stock ownership guidelines described in the following paragraph.
Stock Ownership Guidelines. Since 2006, we have maintained stock ownership guidelines for ournon-employee directors. We expect our directors to accumulate shares equal to five times their annual cash retainer within five years from their initial appointment or election as a director, or to be making progress towards meeting the guidelines. For our Board Chair that equates to a value of $600,000, for our Vice Chair, if any, that equates to a value of $500,000, and for the other directors, it equates to a value of $325,000. All of ournon-employee directors currently comply with these ownership guidelines, with the exception of Peter Mainz who joined the Board within the last three years.
Deferred Compensation Plan.Pursuant to the Company’s Amended and Restated Executive Deferred Compensation Plan dated January 1, 2012, ournon-employee directors are eligible to participate in that plan, and may defer up to 100% of any director fees and 100% of any shares of common stock that he or she anticipates receiving into a nonqualified account.
2017 | Board Vice Chair retainer | | | | |
| Total annual Board Vice Chair retainer(3) | | | $280,000 | |
| Cash | | | $115,000 | |
| Stock | | | $165,000 | |
(1)
| Director compensation is payable quarterly at the beginning of each quarter. |
(2)
| Applies to our non-employee directors (other than our Board Chair and Vice Chair). Mr. Deitrich is our CEO. In accordance with our Governance Principles, our employee directors do not receive any compensation for serving on the Board. |
(3)
| In 2014, the Board adopted a policy that permits a director age 65 or older to elect to receive all of his or her retainer in cash, provided they continuously meet the stock ownership guidelines described under “Stock Ownership Guidelines”. |
(4)
| The Board Chair receives no additional retainers for serving on any of our committees. |
2022 Director Compensation Table (for all
non-employee Directors)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Director Compensation | |
Name | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) (18) | | | Option Awards ($) (19) | | | Non-Equity Incentive Plan Compensation ($) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($) | | | Total ($) | |
Kirby Dyess (1)(2)(3) | | | 74,000 | | | | 99,849 | | | | — | | | | — | | | | — | | | | — | | | | 173,849 | |
Jon Eliassen (4) | | | 90,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 90,000 | |
Charles Gaylord (5) | | | 40,000 | | | | 49,965 | | | | — | | | | — | | | | — | | | | — | | | | 89,965 | |
Thomas Glanville (6) | | | 85,000 | | | | 99,849 | | | | — | | | | — | | | | — | | | | — | | | | 184,849 | |
Frank M. Jaehnert (1)(7) | | | 86,500 | | | | 99,849 | | | | — | | | | — | | | | — | | | | — | | | | 186,349 | |
Jerome Lande (8)(9)(10)(11) | | | 85,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 85,000 | |
Timothy Leyden (8)(12)(13) | | | 97,500 | | | | 99,849 | | | | — | | | | — | | | | — | | | | — | | | | 197,349 | |
Peter Mainz (1)(9)(10) | | | 81,500 | | | | 99,849 | | | | — | | | | — | | | | — | | | | — | | | | 181,349 | |
Daniel Pelino (1)(2)(14) | | | 74,000 | | | | 99,849 | | | | — | | | | — | | | | — | | | | — | | | | 173,849 | |
Gary Pruitt (8)(9) | | | 85,000 | | | | 99,849 | | | | — | | | | — | | | | — | | | | — | | | | 184,849 | |
Diana D. Tremblay (9)(15) | | | 90,000 | | | | 99,849 | | | | — | | | | — | | | | — | | | | — | | | | 189,849 | |
Lynda Ziegler (16)(17) | | | 115,000 | | | | 124,805 | | | | — | | | | — | | | | — | | | | — | | | | 239,805 | |
| Thomas S. Glanville(1)(2)(3) | | | 46,250 | | | 82,453 | | | — | | | — | | | — | | | 31,351(17) | | | 160,054 | |
| Mary C. Hemmingsen(4)(5) | | | 19,632 | | | — | | | — | | | — | | | — | | | — | | | 19,632 | |
| Frank M. Jaehnert(6)(7) | | | 105,000 | | | 164,819 | | | — | | | — | | | — | | | — | | | 269,819 | |
| Jerome J. Lande(4)(8)(9) | | | 85,000 | | | 164,819 | | | — | | | — | | | — | | | — | | | 249,819 | |
| Timothy M. Leyden(10) | | | 265,000 | | | — | | | — | | | — | | | — | | | — | | | 265,000 | |
| Santiago Perez(6)(11) | | | 87,280 | | | 164,819 | | | — | | | — | | | — | | | — | | | 252,099 | |
| Gary E. Pruitt(4)(12) | | | 250,000 | | | — | | | — | | | — | | | — | | | — | | | 250,000 | |
| Diana D. Tremblay(13) | | | 132,720 | | | 193,440 | | | — | | | — | | | — | | | — | | | 326,160 | |
| Lynda L. Ziegler(11)(14)(15) | | | 110,316 | | | 181,157 | | | — | | | — | | | — | | | — | | | 291,473 | |
(1)
| Member of the Compensation Committee. Audit/Finance Committee until his retirement from the Board at the 2022 annual meeting. |
(2)
| Member of the Corporate Governance Committee. |
(3) | Ms. Dyess joined theNominating and Corporate Governance Committee until his retirement from the Board at the 2017 Annual Meeting and served as a member of that committee for the remainder of the year. 2022 annual meeting. |
(4)(3)
| Mr. EliassenGlanville did not stand forre-election at the 2017 Annual Meeting2022 annual meeting and retired effective May 12, 2017. 2022. |
(5)(4)
| Mr. Gaylord did not stand forre-election at the 2017 Annual Meeting and retired effective May 12, 2017.
|
(6) | Chair of the Audit/Finance Committee.
|
(7) | Chair of the Corporate Governance Committee.
|
(8) | Member of the Audit/Finance Committee. |
(9)(5)
| Ms. Hemmingsen joined the Board effective October 7, 2022. |
(6)
| Member of the Value EnhancementNominating and Corporate Governance Committee. |
(10)(7)
| Messrs.Mr. Jaehnert became a member of the Nominating and Corporate Governance Committee and became Chair of the Compensation Committee effective May 12, 2022.
|
(8)
| Mr. Lande and Mainz werewas initially appointed to the Board pursuant to a cooperation agreement with Coppersmith Capital Management, LLC, Scopia Management, Inc., and Jerome J. Lande, and Peter Mainz.Lande. |
(11)(9)
| Mr. Lande waived equity grants and hisLande's cash retainers were paid directly to Scopia Capital Management LP. |
(12)(10)
| Chair of the Value EnhancementAudit/Finance Committee. |
(13) | Mr. Leyden left the Corporate Governance Committee at the 2017 Annual Meeting. elected to receive his 2022 equity awards in cash. |
(14)(11)
| Mr. Pelino joined the Corporate Governance Committee at the 2017 Annual Meeting.
|
(15) | ChairMember of the Compensation Committee.
|
(16)(12)
| Mr. Pruitt elected to receive his 2022 equity awards in cash. |
(13)
| Ms. Tremblay was appointed Board Chair effective May 12, 2022. |
(14)
| Chair of the Nominating and Corporate Governance Committee. |
(15)
| Ms. Ziegler servedstepped down as a memberBoard Chair effective May 12, 2022 and was appointed to the Compensation Committee, as Chair of the Nominating and Corporate Governance Committee, but was not compensated pro-rata for her service on that committee.for her position as Board Chair. |
(17)(16)
| Chair of the Board.
|
(18) | The amounts in this column reflect the aggregate grant date fair value of the awards determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). Quarterly retainer grants to directors vest immediately. Mr. Eliassen elected to receive his retainer in cash. Ms. Dyess, Mr. Jaehnert, |
(17)
| Represents retirement gift reimbursement of airline tickets and Mr. Mainz elected to defer their equity grantsrelated gross up for 2017. As of December 31, 2017, the following directors had the following RSUs outstanding: F. Jaehnert – 304; J. Lande – 313; T. Leyden – 289; P. Mainz – 608; D. Tremblay – 304.income taxes. |
(19) | No options were granted tonon-employee directors in 2017. As of December 31, 2017, the following directors had the following options outstanding: K. Dyess – 4,099; J. Eliassen – 1,000; C. Gaylord – 3,486; T. Glanville – 2,102; G. Pruitt – 3,486. | | -12- | | | |
LEADERSHIP STRUCTURETABLE OF THE BOARDCONTENTS
Stock Ownership Guidelines
Since 2006, we have maintained stock ownership guidelines for our non-employee directors. We expect our directors to accumulate shares equal to five times their annual cash retainer within five years from their initial appointment or election as a director, or to be making progress towards meeting the guidelines. Based on 2022 director compensation, for our Board Chair that equates to a value of $650,000, and for the other directors, it equates to a value of $375,000. All of our non-employee directors currently comply with these ownership guidelines.
Deferred Compensation Plan
Pursuant to the Company’s Amended and Restated Executive Deferred Compensation Plan dated January 1, 2012, our non-employee directors are eligible to participate in that plan and may defer into a nonqualified account up to 100% of any director fees and 100% of any shares of common stock that he or she anticipates receiving.
TABLE OF DIRECTORSCONTENTS
Leadership Structure of the Board of Directors The leadership of our Board is managed by our Board Chair. Our
Corporate Governance
Guiding Principles
(Governance Principles)generally require the role of Board Chair to be held by an independent director who meets the independence requirements of
NASDAQ.the Nasdaq Stock Market. The Board believes having separate roles of Board Chair and CEO allows for a more balanced workload between the Board Chair and the CEO, especially in light of the current duties and responsibilities of the Board Chair, which include the following:
| ◾ | | Preside over all meetings of the Board (including executive sessions of the Board) and meetings of the shareholders;
|
| ◾ | | Review the agendas of each Board and committee meeting;
|
| ◾ | | Prepare agendas as needed for executive sessions of the independent directors;
|
| ◾ | | Serve as a liaison between the independent directors and the CEO;
|
| ◾ | | In consultation with the CEO, make recommendations to the Corporate Governance Committee as to membership of Board committees and appointment of Board committee Chairs; and
|
| ◾ | | Perform such other duties as the Board may require.
|
Preside over all meetings of the Board (including executive sessions of the Board) and meetings of the shareholders;
Review the agendas of each Board and committee meeting;
Prepare agendas as needed for executive sessions of the independent directors;
Serve as a liaison between the independent directors and the CEO;
In consultation with the CEO, make recommendations to the Nominating and Corporate Governance Committee as to membership of Board committees and appointment of Board committee Chairs; and
Perform such other duties as the Board may require.
Pursuant to
theour Governance Principles, the Board Chair must be an independent director unless the Board determines that the best interests of shareholders would otherwise be better served. The Board Chair is elected by
a majority of the members of the Board following the annual meeting of shareholders (or at such other time as a vacancy for the role of Board Chair may occur). The Board Chair serves for a term of three years (provided such director is
re-elected by shareholders if his or her term as a director does not coincide with his or her term as Board Chair). The Board Chair may not serve more than two consecutive terms unless the Board approves an extended term. Our current Chair,
Lynda L. Zeigler,Diana D. Tremblay, is serving her first
term that will expire at the 2019 annual meeting.term.
If the Board determines that it is in the best interests of the shareholders to combine the roles of CEO and Board Chair, the Board will appoint a Lead Independent Director with the duties set forth in
theour Governance Principles.
Since February 2015, our Governance Principles have provided for the role of Vice Chair, to be held by an independent director who meets the independence requirements of NASDAQ, unless the Board determines that the best interests of shareholders would otherwise be better served. As stated in the Governance Principles, the Vice Chair is appointed by the members of the Board and serves for a term to be determined by the Board (provided such director isre-elected by shareholders if his or her term as a director does not coincide with his or her term as Vice Chair). At the 2016 annual meeting after the elevation of Lynda L. Zeigler from Vice Chair to Chair, the Board chose to leave the position of Vice Chair vacant.
The Vice Chair, who like the Board Chair may serve on Board committees, has the following duties and responsibilities:
| ◾ | | Attend all meetings of the Board (including executive sessions of the Board) and meetings of the shareholders;
|
| ◾ | | Review the agendas of each Board and committee meeting and assist in the preparation of agendas as needed for executive sessions of the independent directors;
|
| ◾ | | Serve with the Board Chair as a liaison between the independent directors and the CEO;
|
| ◾ | | In consultation with the Board Chair and the CEO, make recommendations to the Corporate Governance Committee as to membership of Board committees and appointment of Board committee Chairs;
|
| ◾ | | Perform all duties of the Board Chair in the event the Board Chair is unavailable or unable to perform his or her duties; and
|
| ◾ | | Perform such other duties as the Board Chair or the Board may require.
|
The current Governance Principles, as amended, may be found online atwww.itron.com by selecting “Investors” and then “Corporate Governance.”
See “CORPORATE GOVERNANCE” in this proxy statement for additional information on our Board.
PROPOSAL 2 – ADVISORY APPROVAL OF EXECUTIVE COMPENSATION(Say-on-Pay)
We are asking our shareholders to approve anon-binding advisory resolution on the Company’s executive compensation programs for our Named Executive Officers (NEOs) (commonly known as“say-on-pay”) as we have described them in this proxy statement. Although this advisory vote isnon-binding, the Board and the Compensation Committee will take into account the outcome of the vote when considering future compensation decisions for our executives. As discussed in the Compensation Discussion and Analysis (CD&A) section of this proxy statement, we believe our compensation programs are reasonable, competitive and strongly focused onpay-for-performance principles that will result in the creation of long-term shareholder value. Some of the features of our compensation programs that illustrate our philosophy are:
| ◾ | | A significant portion of an NEO’s compensation isat-risk or performance-based and subject to the Company’s operating and financial performance. We consider annual cash-based incentives, equity long-term incentives, and stock options to be performance-based, because each of these three elements is valuable to the executive only if performance goals are achieved and/or our share price improves. In fiscal year 2017, the executive compensation package (base salary and short- and long-term incentives at target) included 84% ofat-risk compensation for the CEO and an average of 71% ofat-risk compensation for the other NEOs. Our long-term incentive plan (LTIP) for equity awards granted under our Amended and Restated 2010 Stock Incentive Plan (A&R 2010 Plan) or Second A&R 2010 Plan, as applicable has three-year performance periods, withone-year averages determined each year for measurement purposes, to encourage NEOs to make decisions that align our long-term goals with shareholder interests and to discourage excessive risk taking.
|
| ◾ | | Stock ownership guidelines require executive officers to acquire and hold certain amounts of Itron stock to further strengthen alignment of management’s interest with those of our shareholders.
|
| ◾ | | We have established an Incentive Repayment (Clawback) Policy that covers awards under all of our incentive programs, and provides that if a bonus or equity award is paid that is conditional on meeting certain financial metrics, and subsequently, there is a required material financial restatement, which had the correct information been known at the time would have resulted in a lower award, then the Board (or its delegated committee) has the right to demand repayment of the excess amount of the award, net of taxes. If the Board (or its delegated committee) determines that fraud has resulted in a material financial restatement, it is required that the Board demand repayment of the full award, net of taxes.
|
| ◾ | | We maintain our long-standing commitment to strong corporate governance by continuing our policies of (i) separate Board Chair and CEO roles, (ii) majority voting for directors, (iii) all independent Board members (except our CEO) and all independent committee members, (iv) executive sessions of independent directors after each quarterly Board meeting, and (v) prohibition on hedging or pledging of Itron stock by our executives.
|
| ◾ | | The compensation of our NEOs varies depending upon the achievement ofpre-established performance goals determined by the Compensation Committee (or the independent members of the Board, for the CEO), which are intended to serve as incentives for our executives. When performance does not meet thepre-established target goals, as was the case in prior years, then the amount of compensation paid to our executives is correspondingly reduced or eliminated. Conversely, when the Company’s operating and financial performance meets or exceeds thepre-established performance metrics, as was the case in fiscal year 2017, then the amount of compensation paid to our executives increases.See “The 2017 Executive Compensation Program in Detail” in the CD&A.
|
We believe our executive compensation policies have enabled us to retain and attract exceptional senior executives whose talent and experience have helped Itron become a leader in our industry. Our Compensation Committee (and the independent members of the Board for CEO compensation), which provides overall direction for our compensation programs, believes the fiscal year 2017 compensation paid to our NEOs is reasonable and appropriate and adequately reflects the Company’s overall performance in 2017.
Shareholders are encouraged to read the full details of our executive compensation programs as described in the Executive Compensation section of this proxy statement.
For the reasons provided above, we recommend that the shareholders vote in favor of the following resolution:
RESOLVED, that the shareholders approve, on anon-binding advisory basis, the compensation of the Company’s NEOs, as disclosed in the Executive Compensation section of the Company’s proxy statement for the 2018 Annual Meeting of Shareholders (which disclosure includes the Compensation Discussion and Analysis (CD&A), the Executive Compensation Tables, and the accompanying footnotes and narratives within the CD&A section of the proxy statement).
THE BOARD OF DIRECTORS RECOMMENDS A VOTEFOR THE APPROVAL OF THE EXECUTIVE COMPENSATION OF OUR NEOs.
PROPOSAL 3 – RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANT
The Board, upon the recommendation of its Audit/Finance Committee, has selected Deloitte & Touche LLP to serve as the Company’s independent registered public accountant for the 2018 fiscal year, subject to ratification by our shareholders. Although not required to do so, the Board is submitting the selection of Deloitte & Touche LLP for ratification by the Company’s shareholders for their views on the Company’s independent registered public accountant and as a matter of good corporate practice. Deloitte & Touche LLP has advised the Company that it has no direct, nor any material indirect, financial interest in the Company or any of its subsidiaries. Representatives of Deloitte & Touche LLP are expected to be present at the Annual Meeting, will have the opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions.
In the event that our shareholders fail to ratify the selection, it will be considered as a direction to the Board and the Audit/Finance Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit/Finance Committee in its discretion may select a different independent registered public accounting firm, subject to ratification by the Board, at any time during the year if it determines that such a change would be in the best interest of the Company and our shareholders.
THE BOARD RECOMMENDS THAT YOU VOTEFOR THE RATIFICATION
OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTANT FOR THE 2018 FISCAL YEAR.
CORPORATE GOVERNANCE
Corporate Governance Guiding Principles
The Company’s Governance Principles are available on the Company’s website,
www.itron.com, by selecting “Investors” and then
“Corporate“Sustainability and Governance.”
Board Matters – Meeting Attendance
Our business, property, and affairs are managed under the
directionoversight of our Board. Members of our Board are kept informed of our business through discussions with our CEO and other officers, by reviewing materials provided to them, by visiting our offices, and by participating in meetings of the Board and its committees.
In accordance with our Governance Principles, directors are expected to attend the Company’s annual meeting of shareholders. All
but one of our directors
attendedserving at the
2017time of the 2022 annual meeting of shareholders
in person or by telephone.attended the meeting. During
2017,2022, the Board met
sixteennine times. All
of the directors attended at least 75% of the meetings of the Board and committees on which he or she served.
Also, in accordance with our Governance Principles, our independent directors meet in an executive session as often as necessary, but no less than fourtwo times annually.
Our common stock is listed on the NASDAQNasdaq Stock Market stock exchange.exchange (Nasdaq). Under the rules of NASDAQ,Nasdaq, independent directors must comprise a majority of a listed company’s board of directors. In addition, the rules of NASDAQNasdaq require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and corporate governance committees be independent. Under the rules of NASDAQ,Nasdaq, a director will only qualify as an “independent director” if that company’s board of directors determines that the person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
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Our Board’s Role in Risk Oversight
The Board has overall responsibility for risk oversight, including, as part of regular Board and committee meetings, general oversight of our executives’ management of risks relevant to the Company. The Board
routinely determines, directly or through Board committees,
that:whether: (i) there are adequate processes designed and implemented by Company management such that risks have been identified and are being managed; (ii) the risk management processes are intended to ensure that Company risks are taken into account in corporate decision-making; and (iii) the risk management processes and procedures ensure that material risks to the Company are brought to the attention of the Board or an appropriate committee of the Board. Each of the Company’s risk management processes are reviewed periodically (but at least once a year) by either the Board or an appropriate committee to which the Board has delegated specific oversight responsibility, as described below. Throughout the year, the Board and each committee spend a portion of their time reviewing and discussing specific risk topics. Committee Chairs regularly report to the full Board on actions taken at committee meetings. At least annually, the Board conducts a review of our long-term strategic plans, and at each of our quarterly meetings, our General Counsel updates the Board on material legal and regulatory matters.
The Audit/Finance Committee is responsible for reviewing our major financial risk exposures, financial reporting, internal controls, credit and liquidity risk, compliance risk, and key operational risks. It meets regularly with our independent auditors and in executive session to facilitate a full and candid discussion of risk and other issues. Our Compensation Committee is responsible for overseeing compensation risks, including assessing
| • | | | Overall responsibility for risk oversight, including cybersecurity risks | | | • | | | Responsible for overseeing compensation risks, including assessing possible risks from our compensation plans and policies for our executives and ensuring that our executive compensation is aligned with Company performance | | | • | | | Oversees our overall corporate governance, including Board and committee composition, Board size and structure, and our director independence | | | • | | | Responsible for reviewing our major financial risk exposures, financial reporting, and monitors our credit and liquidity risk, and compliance risk | |
| • | | | Assesses directly, through Board committees or through established processes and procedures, risks relevant to the Company | |
| • | | | Reviews our Governance Principles annually pursuant to its charter | |
| • | | | Meets regularly with our independent auditors and in executive session to facilitate a full and candid discussion of risk and other issues | |
| • | | | Reviews a summary and assessment of such risks annually and in connection with discussions of various compensation elements and benefits throughout the year | |
| | | | | | | | | | | | | | | | | | | | | | | |
possible risks from our compensation plans and policies for our executives and ensuring that our executive compensation is aligned with Company performance. The Compensation Committee reviews a summary and assessment of such risks annually and in connection with discussions of various compensation elements and benefits throughout the year. Our Corporate Governance Committee oversees risks related to our overall corporate governance, including Board and committee composition, Board size and structure, and our director independence. The Corporate Governance Committee reviews our Governance Principles annually pursuant to its charter.
Following a review of the Company’s current risk management systems and processes, the Board has concluded that the current allocation of oversight responsibilities between the Board and its committees is adequate, provided that the committees continue to coordinate their risk oversight responsibilities, share information appropriately with the other Board members, and provide timely and adequate reports to the full Board. The Board continually evaluates its risk oversight role.
The Company has adopted a Code of Conduct that applies to all directors, officers, and employees of the Company and any subsidiary of the Company and is available on the Company’s website,www.itron.com, by selecting “Investors” and then “Corporate“Sustainability and Governance.” In addition, we have adopted policies and procedures for reporting and investigating suspected violations of the Code of Conduct. The Company intends to satisfy any future disclosure requirement under Item 5.05 of Form8-K regarding an amendment to or waiver from application of the code of ethics or provisions of the Code of Conduct, that applies to the CEO or the CFO, by posting such information on our website,www.itron.com.
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The Company has adopted an Anti-Hedging Policy that prohibits our directors, officers, and employees from entering into transactions involving our securities that are designed to hedge or offset any decrease in the market value of Itron securities.
See “
EXECUTIVE COMPENSATION – CD&ACompensation Discussion and Analysis – Anti-Hedging Policy” in this proxy statement for more information on this policy.
Director Term Limit and Retirement Guidelines In 2022, the Board amended our Governance Principles to include a term limit provision to encourage Board refreshment. Non-executive directors will not be eligible to stand for re-election after serving as a director for five full terms on the Board, with limited exceptions. Additionally, the Board amended the retirement policy under which directors may not be nominated or appointed after age 75, unless the Board determines that it would be in the best interests of the Company’s shareholders to extend the director’s period of eligible service.
Incentive Repayment (Clawback) Policy
The Company has adopted a repayment or “clawback” policy, which provides that if a bonus or equity award (Award) is paid that is conditioned on meeting certain financial metrics, and subsequently, there is a required financial restatement, which, had the correct information been known at the time, would have resulted in a lower Award, then the Board has the right to demand repayment of the excess amount of the Award, net of taxes, from an executive officer who has received an Award. If the Board (or its delegated committee) determines that fraud has resulted in a material financial restatement, it is required that the Board demand repayment from the executive officer engaged in the fraud of the full Award, net of taxes.
The Company intends to adopt a revised Clawback Policy in compliance with final rules from Nasdaq when they become effective.
Director Nominations by Shareholders
In accordance with the Company’s Amended and Restated Bylaws, in order to nominate a director for election to the Board at an annual meeting of shareholders, a shareholder must deliver written notice of such nomination to the Corporate Secretary of the Company at the Company’s executive offices no fewer than
6090 days nor more than
90120 days prior to the date of the annual meeting (or if less than 60 days’ notice or prior public disclosure of the date of such annual meeting is given or made to the shareholders, not later than the tenth day following the day on which notice of the date of the annual meeting was mailed or public disclosure was made). The notice of a shareholder’s intention to nominate a director must include:
| ◾ | | the name and address of the shareholder;
|
| ◾ | | a representation that the shareholder is entitled to vote at the meeting at which directors will be elected;
|
| ◾ | | a statement of the number of shares of the Company that are beneficially owned by the shareholder;
|
| ◾ | | a representation that the shareholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice;
|
the name and address of the shareholder;
a representation that the shareholder is entitled to vote at the meeting at which directors will be elected;
a statement of the number of shares of the Company that are beneficially owned by the shareholder; and
a representation that the shareholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice;
and the following information with respect to the person nominated by the shareholder:
name and address;
other information regarding such nominee as would be required in a proxy statement filed pursuant to applicable SEC rules;
a description of any arrangements or understandings between the shareholder and the nominee and any other persons (including their names), pursuant to which the nomination is made; and
the consent of such nominee to serve as a director, if elected.
Any notice of director nomination submitted to Itron must include the additional information required by Rule 14a-19(b) under the Exchange Act.
| ◾ | | name and address;
-18- | | | |
These financial results reflect our continued operational transformation, including the implementation of global sourcing projects. The transition of our global supply chain will provide long-term flexible capacity and lower costs, while driving our core business objectives of predictability, profitability, and growth. During this time, our executive leadership team also remained focused on the Company’s strategic vision to be a leading partner with utilities in the resourceful delivery and use of energy and water. The Company took additional steps to invest in the internet of things (IoT) and networking capabilities to reduce operating expenses and create new revenue opportunities. The 2017 acquisitions of Comverge, Inc. and Silver Spring Networks, Inc. were of significance —TABLE OF CONTENTS